How to render smooth alpha transistion between two objects?
Yes the renderer has access to geometry data, but the Z-channel clipping is still sharp no matter what.

You would have to make the ground plane transparent where the particles are crossing behind it, which one can do, but it would be pointless because it's not the effect you are looking for - any geometry behind ground could be seen.

What you need to do is to render smaller particles closer to the camera that don't intersect the ground.